Seth Gordon writes: > The number of developer-hours that F can attract is roughly > proportional to F's quality, Only tangentially true. The investment that a piece of software (F or P) can attract is dependent upon its payback. Nobody but nobody invests money unless they anticipate getting more value back than the current value of the money. Why? Because people prefer consumption today over consumption tomorrow. An investment is deferred consumption therefore in every case someone making an investment wants to get more than their investment back. (Note to Ian: Economics IS a rigorous discipline, provided you stick to the parts that are subject to rigorous analysis). An entrepreneur (or a person playing the role of entrepreneur) has anticipated the onset of a problem which his software will solve. The capitalist (or a person playing the role of capitalist) defers consumption by loaning capital to the entrepreneur. The entrepreneur spends the capital on a worker (or a person playing the role of worker), who will only work if paid concurrently with the work. In the case of P, the investment is spent paying developers even when there is no income, maybe even for years. This investment is justified by the entrepreneur to the capitalist because the software is proprietary. In the case of F, the developer is often acting as entrepreneur, capitalist, and worker, all rolled into one. The developer has a problem worth solving, defers consumption, and works on the software. In each of these separate decisions, they are made using the same criteria regardless of whether the software is free or proprietary. They only appear to be different because the F developer plays all three roles at the same time. > Unfortunately, my primary economics education comes from reading Paul > Krugman's columns, so I'm not sure how to develop my theory into > something that would convince the pros -- and I'm afraid that if I > tried, I would waste a lot of time reinventing wheels. If one of the > business or economics gurus on this list could give me a list of > background reading, Start with _Economics in One Lesson_, by Henry Hazlitt, and then dive headfirst into _Human Action_, by Ludwig Von Mises. The latter is an expensive, thick, dense, and often impenetrable book, but if you can make your way through it, no economic issue will be beyond your grasp. It's also online at http://www.mises.org/humanaction.asp . -- -russ nelson <sig@russnelson.com> http://russnelson.com Crynwr sells support for free software | PGPok | Microsoft rivets everything. 521 Pleasant Valley Rd. | +1 315 268 1925 voice | Linux has some loose screws. Potsdam, NY 13676-3213 | +1 315 268 9201 FAX | You own a screwdriver.